This article feels like a conversation between the Left and the... Left. The left somehow (this time from an "African Perspective") has to convince itself to leave people and companies alone and let them be productive by acting in their economic interests.

In one sense it's enlightening that the Left periodically realizes its insatiable political needs are detrimental to the health and well being of companies and economies. In another sense, it's depressing that another generation of Leftists will cause chaos and mayhem rediscovering these truths yet again.

Companies aren't charities! Maybe so, but they are not the piggybank of CEO and his cronies either.

One could make a case that being nice to customers and being good coprporate citizens pays greater dividends in the form of goodwill than handing out disproportionate cash piles to CEOs as if it were loot. And, I am saying this as someone who is an active investor and finds current corporate compensation practices obnoxious.

Too often, capitalist companies forget that man is at the centre of all profit creation and at-all-cost profit shouldn't be at the expense of this same man. Capitalism will survive if this simple truth survives.

Too often, capitalist companies forget that man is at the centre of all profit creation and at-all-cost profit shouldn't be at the expense of this same man. Capitalism will survive if this simple truth survives.

It´s time to go back to the basics. It´s time we all thought about a new system, one that does not stiffle entrepreneurship yet at the same time prevents the extreme & socialdarwinistic tendencies of greedbased Capitalism.

And there is no choice in this matter. Just look at France. The 'plebs' will tolerate a lopsided, asymmetric performance of justice for only so long...before they revolt.

In rich countries it is ethical business (business is for making profits at any cost) to import goods at the cost of local jobs. The Government is of course expected to bail-out jobless by printing currency or junk bonds. I can not understand this kind of logic. Business is for making profits - Government is for providing money to enable them to make profits.

Economic mobility. In my opinion, the biggest and best contribution that business makes to society is economic mobility. Thousands of years of thousands of governments failed to create conditions for economic mobility comparable to those created in the wake of Adam Smith.

Without a job, any job, it's hard to get training or pay for schooling. Without training or schooling, you and your children are going to stay at the same level for the foreseeable future.

Dozens of generations of serfs can attest to the fact that government can do nothing to rectify this problem save in the instance of said serf lifting a sword out of a stone.

As terrible as sweatshop conditions can be, they are not the worst thing imaginable to the desperately poor. I assure developed-country readers that Shump was not exaggerating with his description of "scavenging from rubbish heaps." This is why thousands still flock to Foxconn, and thousands more will continue to flock until the rising tide has lifted all boats to the next lock.

Im a 2nd year economics student and already it takes me one minute to think of multiple arguments against the hailed invisible hand guiding private business. May I?:
Externalities
An inability to supply or manage public goods
Suboptimal equilibria in game theory
Imperfect expectations and irrationality (yes they exist)
Focus on often distorted prices
Monopolies
Conflict of short and long term interest and strategies

I know that technically it is the role of government to regulate these failures but governments seem to be as imperfect as the invisible hand, especially in developing countries. And yes, I absolutely agree that dynamic and efficient private businesses play a crucial role in developing countries. But as long as there is little state to regulate their failures I would be happy to see them consider the responsibility they have as entities run by human beings.

But I thought CSR and "green" were the next BIG things in B-schools! Ypuean to say no? Ever heard of things like "triple bottomline"? What if the "company" is an SOE (state owned enterprise), as more and more these days, like eg say Petrochina which is "listed" after all?

In a free and competitive market, firms have been improving the World since the industriale revolution by inventing and making goods or services to meet the needs of customers. To stay in business, they must offer newer products or goods with lower prices or higher quality than their competitors. Those that fail disappear. Those that succeed spread prosperity. Every day they must do better than the day before.
In this way the citizens of West, as me, are living better than other...
But now we're in danger of losing our wealth because we are loosing the will to do, we have too many rules and our politicians, at least in Italy, are not really good.

I think CSR is simply a govt. failure which the pvt corporations are being asked to correct.

Schumpeter should also mention the limitation of profit motives.

@Ohio et al.
An alternate view.

In the good old days when profit motives used to bring all that was good to the society, the bad usually used to happen in places we don't know or don't care about.
From Adam Smith to Ms. Bernstein, the free market proponents have looked at only the 'urban market place', not the factory, not the mines, not the farms.
They have also failed to see the exceptional events and circumstances.

E.g. The coal mine brings coal to the market, profits to mining company, wages to workers, but how does the free market works when an accident occurs and the miners die?
For Smith, the value of a tree was only in wood (at urban market place), not in oxygen, which as we all know has some value.

Kudos to Schumpeter and to Ann Bernstein. What a refreshing piece to find in The New Economist in the Age of Obama. No talk of more stimulus here, no acceptance of smothering regulation, no creditors forced by the courts to swallow loans gone bad, certainly no promotion of government guidance through the thicket of "climate change." No, for the first time since this newspaper's bizarre endorsement of a man who would not have a clue what Ann Bernstein is talking about I find a piece which discusses capitalism as it is intended: self-interested, yes (gasp), but a self-interest which, as if guided by an invisible hand, becomes an equivalent altruism. Of course, it takes someone in far off South Africa to remind this newspaper of what it once stood for -- perhaps the star-struck sophomore girls of the editorial staff could take some time off from being "inspired" (their word!) by Barack Obama to read Ms. Bernstein's book.

Everytime I look at the 20 pound note I wonder how people can forget the benefits Mr Smith's insight have brought for our world!

Although the Wealth of Nations was relatively painful to read it has given an idea of how much value our economic focus is. Reading about the benefits the division of labour has brought to pin manufacturing and looking at my laptop, a wonder of human evolution, was a very satisfying feeling. We shouldn't abandon our main focus on our benefits and profits just because NGOs put pressure on our companies although on the other hand CSR can almost be considered as a form of premium branding, a very capitalist idea indeed.

Adam Smith's key insight was that more good has been done in the service of greed than has ever even been dreamt of in the service of altruism. The invisible hand of the market is its self-organizing nature. People who freely exchange goods and services do so because both parties benefit. There is a need for altruistic good deeds in our society, just as there are tasks best carried out by a regulated monopoly, but these are secondary forces which correct for the imperfections of the market, not a replacement for that market. Governments that do not take care to make sure the market is producing excess wealth through unfettered commerce generally find that there is little wealth left for altruism, or even basic governance.